HI5019 Strategic Information Systems: A Strategic Analysis of Coles

This report provides a strategic analysis of Coles Supermarket, covering its business background, industry, general environment, competitive environment, opportunities, and threats. It includes an internal analysis of tangible and intangible resources, capabilities, and core competencies. Based on this analysis, the report proposes a suitable information system solution for Coles, evaluating its potential impact. The external analysis explores the political, economic, social, technological, physical, global, and demographic factors influencing Coles. The industry analysis examines buyer and supplier power, new entrant threats, rivalry, and substitute threats. The competitive analysis identifies key competitors like Aldi and Woolworths and their strategies. The internal analysis assesses Coles' resources, capabilities, and core competencies, including its distribution system and brand reputation. The report concludes with a recommendation for a strategic information system to enhance Coles' competitive advantage.

RUNNING HEAD: Strategic Information System
Strategic Information System

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Contents
Introduction......................................................................................................................................2
External Analysis.............................................................................................................................2
Background of the Business.........................................................................................................2
Industry........................................................................................................................................2
General Environment Analysis....................................................................................................3
The Industry Environment...........................................................................................................4
Competitive Environment............................................................................................................5
Opportunities and Threats............................................................................................................5
Internal Analysis and Proposal........................................................................................................6
Tangible and Intangible Resources of Coles Supermarket..........................................................6
Identification of Capabilities........................................................................................................6
Core Competency Analysis..........................................................................................................7
Proposal of Suitable Information System Solution......................................................................7
Evaluation of Proposed System Solution.....................................................................................8
Conclusion.......................................................................................................................................8
References........................................................................................................................................9
Bibliography..................................................................................................................................11

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Introduction
Strategic information systems are the information systems which assists an organization in an
effective management of information and strategic decision making. These systems play an
important role in changing or supporting the enterprise’s strategy. It is easily aligned with the
structure and strategy of the business (Arvidsson, Holmstrom and Lyytinen, 2014).
This report focuses on the strategic analysis of Coles supermarket. It covers the business
background, industry, general environmental analysis, industry environment, competitive
environment along with the opportunities and threats of Coles. Furthermore, this report provides
resources, capabilities and core competency analysis. On the basis of this analysis, a suitable
information solution has been recommended for Coles.
External Analysis
Background of the Business
Coles Supermarkets Australia Pty Ltd is the retail, customer service and the supermarket chain of
Australia having its headquarters situated in Melbourne. The company trades under the name
Coles. However, the company is owned by the parent company Wesfarmers.
The company was founded in the year 1914 in Collingwood, Melbourne by George Coles. There
are approximately 807 supermarkets of Coles throughout Australia. Some of its stores are also
re- branded as BI- LO Supermarkets. Furthermore, the company has employed more than
100,000 employees for the effective performance of its operations. The market share of Coles
along with its competitor Woolworth amounts to approximately 80 % of the total market share of
Australia. Coles also has its online store where it provides different offers to its customers
including click and collect and home delivery options (Coles, 2018).
Industry
Coles belongs to retail, consumer services and supermarket industry. This industry offers a wide
variety of products to the customers but has a small range of merchandise as compared to that of
a big- box market and hypermarket. The industry is based on the strategic level decisions
undertaken by the retailers which play an important part in the market positioning. In the digital

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age, broader markets are being reached by the increasing number of retailers in the industry by
making sales through multiple channels such as online retailing and bricks and mortar.
General Environment Analysis
Political/ Legal- the performance of Coles supermarket is greatly affected by the political
condition of Australia. The competition policy of Australia prevents the elimination of
competition by the major market players i.e. Coles and Woolworths. The market dominance of
these players have increased the struggles of small retailers in the industry (Webster, Bargon and
Carter, 2015).
Economic- the economic market conditions of Australia have significantly affected the
performance of Coles. This is due to the fact that the markets of Australia have suffered a decline
in the economic activity. The retail operations of Coles is also adversely affected by the
weakening of Australian dollar and currency exchange rates fluctuations (Vinkeles Melchers,
Gomez and Colagiuri, 2009).
Social- high societal and community development across Australia have affected the Australian
retail industry. Customers increasingly demand a socially responsible organization. Various
social initiatives undertaken by Coles have resulted in creating a significant impact over the
customers.
Technological- Retail industry is significantly affected by the technological developments across
Australia. Green refrigeration technology has also been adopted by Coles for storing the
perishable products for a longer period of time. It is also taking steps for enhancing the online
shopping experience of the customers (Webster, 2015).
Physical- The business practices and consumer behavior have changed over a period of time
which affects the retail industry of Australia and Coles supermarket. Coles has taken various
initiatives for the society and its upliftment and ensures that its business operations do not leave a
negative impact on the environment.
Global- Millions of Australians have already been served by Coles in Australia for over 100
years. However, it is further planning to expand its operations in different parts of the world in
the near future.

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Demographic-Due to the Australian immigration policy, the population structure of Australia has
completely changed. There are some ethnic and religious groups which constitutes the
population of Australia. The composition of older adults is also increasing in the population of
Australia. Coles and the entire retail industry is affected by these factors (Williams and Connell,
2010).
The Industry Environment
Bargaining Power of Buyers- Australian retail industry suffers from high bargaining power of
the buyers. This is due to the fact that there are large number of retail stores and supermarkets in
the industry that offers basic necessity items to the consumers. Since large numbers of options
are available to the consumers to choose from, the bargaining power of the buyers is significantly
higher. Coles sometimes loses its customers to the competitor Woolworths (Martin, 2015).
Bargaining Power of Suppliers- the bargaining power of the suppliers in the Australian retail
industry is moderate. There are some big players in the market having the major part of the
market share. This leads to the increase in the bargaining power of the suppliers. Coles also take
number of steps in order to main an effective relationship with the suppliers.
Threats of New Entrants- the Australian retail industry suffers from low threat from the new
entrants due to the existing industry conditions which will lead to difficulty in their survival.
Furthermore, the operations of Coles supermarket are on large scale which does not get affected
by new entrants (Zhu, Singh and Manuszak, 2009).
Rivalry among Existing Firms- The threat of rivalry is higher in the Australian supermarket
industry as there are only few big competitors such as Coles, Woolworths, Asda, etc. which
compete for a bigger market share in the industry. All the supermarket aims at adopting the
competitive strategies in order to attract the customers of the competitors.
Threat of Substitutes- The daily consumable products offered by retail is very essential and has
no other alternatives. There is lower threat of substitutes. Coles face competition when the
competitor provides facilities to the customers in the form of easy parking, easy shopping and
less queues (Pearlson, Saunders and Galletta, 2016).

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Competitive Environment
Aldi and Woolworths are the strong competitors of Coles supermarkets and are the part of the
strategic group. Woolworths is bringing a significant reduction in its prices in order to compete
with Coles. The capabilities of these firms include their strong brand reputation. The competitors
are coming forwards with innovative strategies which sometimes have a significant impact on
the profitability and sales of Coles. The fall in profitability is the result of their strong investment
in lowering prices. This has created a threat for Coles Supermarket. The logistic arrangements of
Aldi are strong which, in turn, creates a major threat for Coles. Competitive advertising is being
adopted by the competitors as a strategy in order to attract the customers. Various discounts and
offers along with the adoption of online marketing have brought a new trend in the Australian
retail industry. However, the acquisition of Coles supermarket by Wesfarmers have resulted in
creating a strong investment base for Coles. This investment assisted in dealing with the
competitors. The number of stores of Coles supermarket are also increasing leading towards
increase in the customer reach (Parker, Carey, De Costa and Scrinis, 2017).
Opportunities and Threats
Opportunities- A good growth potential is portrayed by the retail industry of Australia. The
changed lifestyle of the customers, increased computerization along with advanced supply chain
have significantly affected by the retailers abilities. This, in turn, has offered immense growth
opportunities to the Australian retailers. This option is expected to be positively embraced by
Coles supermarket by the adoption of multi- option retailing for the purpose of coping up with
the dynamic needs of the customers. The technological developments further offer a number of
opportunities to Coles as it can assist in enhancing the quality, service and experience of the
customers across stores. It has also been analyzed over a period of time that customers get
attracted towards offers and discounts, therefore, some strategies can be formulated in this regard
(Tuzovic and Mathews, 2017).
Threats- the biggest threat of Coles supermarket is from Woolworths and Aldi which are its
biggest competitors. The needs of the customers are changing constantly which may affect the
sales and profitability of the enterprise. Also, government intervention can prove to be a major
threat in the smooth operations of Coles supermarket. The economic turndown has further
lowered the confidence of the customers. the competitive strategies being adopted by the

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competitors from time to time may lead to unfavorable circumstances for Coles (Bailey, Price,
Pyman and Parker, 2015).
Internal Analysis and Proposal
Tangible and Intangible Resources of Coles Supermarket
The success of any enterprise depends upon its resources whether tangible or intangible. Same is
the case with Coles supermarket also. Coles have outstanding tangible and intangible resources
in the form of superior management, team of human resources and physical resources required to
accomplish its business operations. Coles supermarket has employed more than 100,000
employees across its several stores in Australia. The employees are dedicated and make their
best possible efforts for the accomplishment of the objectives of Coles. The outstanding efforts
of the employees have led the company towards the attainment of an exceptional brand
reputation which is an intangible resource of Coles. The service quality of Coles is also one of
the resources of Coles supermarket. The quality of the products offered is also exceptional.
Proper management, innovative strategies and wider product range offered by Coles also
comprise the resources of Coles supermarket (Lewis and Huber, 2015).
Identification of Capabilities
The capabilities of Coles have played a major part in the attainment of its objectives. With the
passage of time, Coles have been able to develop an effective distribution system with the help
of which it is capable of distributing the products across its stores. The customers are able to
meet its requirements as a result of the effective distribution system of Coles supermarket.
Moreover, the orders made online are also distributed to the customers on the defined time
leading to the increasing trust of the customers towards the brand (Narayan, Rao and Sudhir,
2015).
The brand reputation is the key behind the increasing sales of Coles its increased profitability. It
offers fresh and healthy products to its customers as a result of which it has been able to develop
a brand reputation. This differentiated image has led Coles to have a major share in the
Australian market. The social responsibility activities undertaken by the company has also
contributed towards its brand image.

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However, the brand image is not the result of certain instant action. The contribution and
strategies of the top level management and the experience and efforts of the workforce play an
important part in building a brand image. There is exceptional talent in the employees of Coles
which makes them able to effectively manage the internal operations. Moreover, the workers
working in the stores have the immense ability of dealing with the customers (Mortimer and
Ingersoll, 2015).
Core Competency Analysis
Resources- the exceptional capabilities of the human resources along with the innovative skills
of the company comprise the biggest resource of the organization. These resources have led the
organization towards new heights and have helped in the attainment of larger market share.
Capabilities- the effective distribution system of Coles along with its brand reputation are its
biggest capabilities. This has increased the sales of the company and has increased the
profitability as well. The distribution system ensures the adequate availability of stock in stores.
This leads to the fulfillment of the customer demand whenever they visit the store (Hebden,
King, Kelly, Chapman and Innes- Hughes, 2011).
Competitive Advantage- the competitive strategies and the innovation skills of Coles provides it
the competitive advantage over the competitors. The brand reputation possessed by Coles has
allowed it to occupy a major share in the market. Moreover, the all- time availability of stock
provides it the competitive advantage.
Strategies- the talented and experienced workforce of Coles offer outstanding ideas to the top
level management who then implement it in their business operations for gaining competitive
advantage. It also offers discounts from time to time in order to attract the customers. The
strategies of Coles play a major role in its success in the Australian retail industry (Pantano,
2014).
Proposal of Suitable Information System Solution
The suitable information system solution in case of Coles supermarket is management
information system. The management information system can be defined as the computerized
database which organizes and programs the financial information in a way such that reports on
operations are produced by the system for each level of management in the company. It will

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assist Coles in getting the requisite feedback regarding its own performance which can be
utilized by the top level management for the purpose of monitoring and taking the needed steps
(Galliers and Leidner, 2014).
When all the departments and levels of management will be aware of the activities, profitability
and requirement of each other, it will be able to facilitate effective decision making in the
organization. The copy of the data with other departments will also ensure its safety in case of
system breakdowns.
There will be pre- programing of the routine reports which will be run at different intervals of
time. The managers of the organization will be able to use the built- in display function of the
system for checking the status of the queries through the computers connected with the
management information system through the networks. The stock of the company can also be
effectively monitored and displayed with the help of sophisticated systems (Gray, Issa, Pye and
Troshani, 2016).
Evaluation of Proposed System Solution
After the evaluation of the management information system as the proposed information
solution, it can be concluded that the business requirements of Coles for operating in the retail
industry of Australia can be effectively facilitated through this system. The security and the
decision making of the company will enhance through the adoption of management information
system. The system of the all the department and at all the level of management will be
integrated through this system solution. This will allow the top level management to monitor the
activities and formulate the required strategies on time. therefore, management information
system is the recommended system solution (Price, 2016).
Conclusion
Therefore, it can be concluded that strategic information systems are the information systems
which assists an organization in effective management of information and strategic decision
making. This report focused on the strategic analysis of Coles supermarket. It covered the
analysis of the external and internal environment along with the identification of its resources
and capabilities. On the basis of this analysis, management information system has been
recommended for Coles.

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References
Arvidsson, V., Holmstrom, J. and Lyytinen, K., 2014. Information systems use as strategy
practice: A multi-dimensional view of strategic information system implementation and use. The
Journal of Strategic Information Systems, 23(1), pp.45-61.
Bailey, J., Price, R., Pyman, A. and Parker, J., 2015. Union power in retail: Contrasting cases in
Australia and New Zealand. New Zealand Journal of Employment Relations, 40(1), p.1.
Coles. 2018. About Coles, [Online]. Available at : https://www.coles.com.au/about-coles
[Accessed on: 30 August 2018].
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Gray, H., Issa, T., Pye, G. and Troshani, I., 2016. Management Information Systems, 1st
Australasian Edition. John Wiley & Sons.
Hebden, L., King, L., Kelly, B., Chapman, K. and Innes- Hughes, C., 2011. A menagerie of
promotional characters: promoting food to children through food packaging. Journal of nutrition
education and behavior, 43(5), pp.349-355.
Lewis, T. and Huber, A., 2015. A revolution in an eggcup? Supermarket wars, celebrity chefs
and ethical consumption. Food, Culture & Society, 18(2), pp.289-307.
Martin, P., 2015. Duncan Phillips-Chemmart: From Cambridge to Coles and now
Chemmart. AJP: The Australian Journal of Pharmacy, 96(1144), p.20.
Mortimer, D. and Ingersoll, L., 2015. The impact of deregulation on employment relations in the
Australian retail industry. Employment Relations Record, 15(2), p.43.
Narayan, V., Rao, V.R. and Sudhir, K., 2015. Early adoption of modern grocery retail in an
emerging market: evidence from India. Marketing Science, 34(6), pp.825-842.
Pantano, E., 2014. Innovation drivers in retail industry. International Journal of Information
Management, 34(3), pp.344-350.

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Parker, C., Carey, R., De Costa, J. and Scrinis, G., 2017. Can the hidden hand of the market be
an effective and legitimate regulator? The case of animal welfare under a labeling for consumer
choice policy approach. Regulation & Governance, 11(4), pp.368-387.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Price, R., 2016. Controlling routine front line service workers: an Australian retail supermarket
case. Work, employment and society, 30(6), pp.915-931.
Tuzovic, S. and Mathews, S., 2017. Points for Fitness–How Smart Wearable Technology
Transforms Loyalty Programs. In Dienstleistungen 4.0 (pp. 445-463). Springer Gabler,
Wiesbaden.
Vinkeles Melchers, N.V., Gomez, M. and Colagiuri, R., 2009. Do socio‐economic factors
influence supermarket content and shoppers' purchases?. Health Promotion Journal of
Australia, 20(3), pp.241-246.
Webster, J., 2015. Whose trolley now?: Workplace liability moves up the supply chain. Proctor,
The, 35(4), p.16.
Webster, J., Bargon, R. and Carter, M., 2015. Supply chain accountability: How far does
responsibility extend?: Recent enforcement outcomes in the trolley collecting
industry. Brief, 42(3), p.22.
Williams, C.L. and Connell, C., 2010. “Looking good and sounding right” aesthetic labor and
social inequality in the retail industry. Work and Occupations, 37(3), pp.349-377.
Zhu, T., Singh, V. and Manuszak, M.D., 2009. Market structure and competition in the retail
discount industry. Journal of Marketing Research, 46(4), pp.453-466.

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